NCLT Ahmedabad Admits Blu Smart Mobility Ltd Into CIRP Over Default Of ₹1.28 Crore

Catalyst Trusteeship Limited (Applicant/ Financial Creditor) filed the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Blu-Smart Mobility Limited (Corporate Debtor). The Corporate Debtor had issued 15 secured, redeemable, unrated, and unlisted Non-Convertible Debentures (NCDs) worth Rs. 15 crore, for meeting its working capital requirements for its 100% electric four-wheeler ride-hailing platform. The NCDs were issued under a Debenture Trust and Hypothecation Deed (DTHD) dated 24.04.2023, executed between the Financial Creditor (acting as Debenture Trustee for the Debenture Holders) and the Corporate Debtor, with a tenor of 24 months. The Corporate Debtor was required to redeem the NCDs in installments. It however, failed to make payments due on 31.03.2025 and 30.04.2025 and 28.02.2025. The Corporate Debtor admitted its liability on 10.04.2025.

Submissions

Counsel for the Financial Creditor submitted that the Corporate Debtor defaulted in payment of installments triggering Events of Default under DTHD. He argued that the debt and default stood established through the Debenture Certificates, NeSL Form-D, and the Corporate Debtor's admission of liability. He argued that the petition is maintainable as per the law laid down in Innoventive Industries Ltd. vs. ICICI Bank. He submitted that the Corporate Debtor's reliance on commercial difficulty or SEBI proceedings is irrelevant to the existence of debt and default under IBC.

Counsel for the Corporate Debtor submitted that the petition was premature and filed with mala fide intent. He argued that the non-payment was due to a temporary financial crunch and did not amount to 'default' under section 3(12) of IBC.

Observations

The Tribunal noted that the Financial Creditor established the existence of a debt. It took note of bank records and NeSL Form-D and the Corporate Debtor's email dated 10.04.2025 admitting liability. The Tribunal observed that “the Corporate Debtor's defences of temporary financial crunch and malicious intent lack evidentiary support and do not negate the debt and default prerequisite for initiation of CIRP”.

The Tribunal noted that there were different default dates for different instalments. It relied on Dena Bank v. C. Shivakumar Reddy to hold that “technical objections, like minor discrepancies in default dates, do not bar CIRP”.

The Tribunal held that the Applicant had discharged its burden under Section 7. Accordingly, it admitted the Section 7 application against the Corporate Debtor.

Case Title: Catalyst Trusteeship Limited vs. Blu-Smart Mobility Limited

Case No.: C.P.(IB)/205(AHM)2025

For the Applicant/F.C. : Mr. Anmol A. Mehta, Advocate

For the Respondent/CD: Mr. Himanshu Dubey, Advocate.

Date of Order: 28.07.2025

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